Chinese love of NZ property dips

Only 14 per cent of young house-hunters in Auckland believe they will get on the property ladder within two years. Photo / Getty Images

Chinese investment in Australian real estate doubled in the latest financial year, but their interest in New Zealand dropped slightly after regulation changes here appear to have acted as a deterrent.

According to the latest annual report of Australia's Foreign Investment Review Board, China was the largest investor for the June 30, 2015 year, receiving approvals to spend $A24 billion.

That was three times the amount invested from United States' entities and six times Singaporean investment, the board said.

The value of Chinese approvals was up from A$12 billion in 2013-14, when China surpassed the US for the first time as Australia's biggest foreign investor in real estate.

New Zealand keeps no data on Chinese buying houses here.

Our only official records on foreign ownership are from the Overseas Investment Office whose jurisdiction only covers transaction involving assets worth $100 million or more or those classified as historic or sensitive including high country, big farms or property alongside rivers, lakes and the sea.

The closest anyone has got lately to measuring Chinese appetite for Auckland housing was Labour housing spokesman Phil Twyford who last year released leaked data from the city's biggest agency, Barfoot & Thompson, on 3922 Auckland property sales from February to April, matched to Auckland electoral roll data, which showed how likely each name was to belong a certain ethnic group.

The Australian board does include residential transactions in its annual report.

"The real estate sector had a significant increase in approvals with 37,347 approvals in 2014-15, compared with 23,428 approvals in 2013-14 and is more than triple the levels of 2012-13. The majority of this increase related to new dwellings approvals. This is consistent with the Government's policy to increase the housing stock by channelling foreign investment into new dwellings," the board said.

Major business deals are also in the Australian data.

"Outside of real estate, the major industries for proposed investment in 2014-15 were services (A$38.8 billion), mineral exploration and development (A$26.7 billion), and manufacturing (A$19.5 billion). Investment by industry is subject to large variations year-by-year due to the impact of large one-off transactions," the board's report said.

Juwai.com, a popular international real estate portal in China, reported that Australia was now the second-most-popular target market for Chinese property investors after the US.

But Juwai found Chinese investors' appetite for New Zealand property has slipped lately. Juwai co-founder Simon Henry said New Zealand had shifted from fourth to fifth most popular country in the world with potential property buyers in China between the third and fourth quarters of 2015.

Henry predicted Chinese buyer interest in New Zealand would return in force by mid-year once they had fully digested new requirements by the Government and Reserve Bank for Chinese wanting to buy here.

Those changes demand non-residents and New Zealanders buying and selling any property other than their main home must provide a New Zealand tax number. Non-residents must also have a New Zealand bank account. Residential property investors in Auckland needing a deposit of at least 30 per cent too.